I’m a Tariff Man

 

From the President’s Twitter account: “President Xi and I want this deal to happen, and it probably will. But if not remember … I am a Tariff Man.”

“When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so,” the president wrote. “It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN.”

The mocking reactions were predictable enough from both the right and the left. It’s interesting, too. From the left it seems we’ve finally found a tax the Democrats don’t want to embrace and a willingness to tell unionized industrial workers in America to go pound sand. From the right, we’ve finally found an issue where they’re willing to say that Ronald Reagan was full of it.

“Wait a minute,” you say. “NAFTA had its roots in the Reagan Administration!” True enough, but Reagan’s was also a presidency full of protectionist tariffs and policies*:

  • Forced Japan to accept restraints on auto exports;
  • Tightened considerably the quotas on imported sugar;
  • Negotiated to increase the restrictiveness of the Multi­fiber Arrangement governing trade in textiles and apparel;
  • Required 18 countries, including Brazil, Spain, South Korea, Japan, Mexico, South Africa, Finland, Australia, and the European Community, to accept “voluntary re­straint agreements” that reduce their steel imports to the United States;
  • Imposed a 45% duty on Japanese motorcycles for the ben­efit of Harley Davidson, which admitted that superior Japanese management was the cause of its problems;
  • Raised tariffs on Canadian lumber and cedar shingles;
  • Forced the Japanese into an agreement to control the price of computer memory chips;
  • Removed third-world countries on several occasions from the duty-free import program for developing nations;
  • Pressed Japan to force its automakers to buy more Ameri­can-made parts;
  • Demanded that Taiwan, West Germany, Japan, and Switzerland restrain their exports of machine tools;
  • Accused the Japanese of dumping roller bearings on grounds so that the price did not rise to cover a fall in the value of the yen;
  • Accused the Japanese of dumping forklift trucks and color picture tubes;
  • Extended quotas on imported clothes pins;
  • Failed to ask Congress to end the ban on the export of Alaskan oil and timber cut from federal lands;
  • Redefined dumping so domestic firms can more easily charge foreign competitors with unfair trade practices;
  • Beefed-up the Export-Import Bank, an institution dedicated to distorting the American economy at the ex­pense of the American people in order to artificially pro­mote exports of eight large corporations.

This was not out of character for Reagan. In the 1980 Republican Platform his ideals toward trade was laid out in clear and simple language. “The [Carter] Administration’s inability to ensure fairness and equity between our nation and some of our trading partners has resulted in massive unemployment in many core industries. As we meet in Detroit, this Party takes special notice that among the hardest hit have been the automotive workers whose jobs are now targeted by aggressive foreign competition. Much of this problem is a result of the present Administration’s inability to negotiate foreign trade agreements which do not jeopardize American jobs. We will take steps to ensure competitiveness of our domestic industries to protect American jobs.” (Emphasis mine.)

As international trade agreements began to be hammered out, through the Republican Administrations of the two Bushes and the Democratic Administrations of Clinton and Obama, how did this work out? Not so well? Hey, these jobs are gone and ain’t coming back. No Reaganite worth his salt would embrace Trump’s tariffs, right?

Again, from the ’80 Reagan platform with my emphasis:

The Republican Party believes that protectionist tariffs and quotas are detrimental to our economic well-being. Nevertheless, we insist that our trading partners offer our nation the same level of equity, access, and fairness that we have shown them. The mutual benefits of trade require that it be conducted in the spirit of reciprocity. The Republican Party will consider appropriate measures necessary to restore equal and fair competition between ourselves and our trading partners.

If you asked any conservative if we should unilaterally disarm militarily they would rightfully look at you as if you had grown a second head. Yet, they will insist on complete unilateral disarmament in trade. But, Trump, right?

*Source: Mises Institute

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  1. HeavyWater Inactive
    HeavyWater
    @HeavyWater

    Tariffs are taxes on the middle class consumer.  Those who support limited government, limited taxation and individual freedom should oppose higher import tariffs.  

    • #31
  2. EJHill Podcaster
    EJHill
    @EJHill

    Neil Hansen (Klaatu): No. Administration’s make policy concessions all the time.

    Protecting American jobs was Reagan’s policy, not his concession.

    • #32
  3. HeavyWater Inactive
    HeavyWater
    @HeavyWater

    EJHill (View Comment):

    Neil Hansen (Klaatu): No. Administration’s make policy concessions all the time.

    Protecting American jobs was Reagan’s policy, not his concession.

    Jobs should not be protected.  Consumers, not government, should be the ones who decide which jobs are retained and which jobs are eliminated.  

    Tariffs protect businesses from foreign competition and raise the cost of living for the middle class consumer.  

    Trump’s tariffs might be good for a select number of CEOs, but they are bad for families who don’t want to pay more for the things they buy.

    If you like higher taxes, you like higher tariffs.

     

    • #33
  4. Cato Rand Inactive
    Cato Rand
    @CatoRand

    Whether there are distributional benefits to tariffs that are substantial enough to justify their manifest costs is something we can argue about, but the rationale articulated in the tweet is unmitigated ignorance.  Claim that the benefits outweigh the costs if you must, but don’t deny the costs.  It just makes him look foolish.

    • #34
  5. philo Member
    philo
    @philo

    EJHill (View Comment): As Reihan Salam wrote last June in National Review, “For all my misgivings about Donald Trump’s economic diplomacy, he has not rejected the modern Republican party’s stance on trade. Rather, he has made a break with George W. Bush’s approach while harkening back to Reagan’s.”

    So he dropped the “compassionate” modifier from the 1999-2000 marketing gimmick that rendered the principles involved mostly impotent and returned to results based leadership. Who woulda guessed? 

    As others have noted in more direct terms, improving the cards in his/our hand was not free and painless but it allowed (or is allowing) him to play an honest, aggressive game instead of the weak, submissive doormat approach of the last several decades. Mr. Trump will win some and lose some (and the market will throw its temper tantrums) but its nice that our guy at the table actually has everyone’s attention and doesn’t have the traditional “kick me” sign on his back.  This fresh approach is good for conservatism…and good for America. 

    • #35
  6. HeavyWater Inactive
    HeavyWater
    @HeavyWater

    If Trump continues to raise taxes, which is what tariffs are, on the American people, Trump could end up driving millions of middle class consumer-voters into the arms of the 2020 Democrat presidential nominee.

    When people go to the Wal-Mart or Lowe’s and find out that prices are higher due to the Trump tariff-tax increases, many people aren’t going to be satisfied that some American CEO is getting a bigger paycheck as a result of Trump’s trade policies.

    • #36
  7. EJHill Podcaster
    EJHill
    @EJHill

    HeavyWater: Jobs should not be protected. Consumers, not government, should be the ones who decide which jobs are retained and which jobs are eliminated.

    Tariffs protect businesses from foreign competition and raise the cost of living for the middle class consumer.

    If you eliminate enough American jobs who is going to buy all those cheap trinkets at Walmart? And hostile state actors like China are to be rewarded? 

    I guess Lenin was right. Provided the rope is cheap enough you’ll gladly hang yourself.

    • #37
  8. HeavyWater Inactive
    HeavyWater
    @HeavyWater

    EJHill (View Comment):

    HeavyWater: Jobs should not be protected. Consumers, not government, should be the ones who decide which jobs are retained and which jobs are eliminated.

    Tariffs protect businesses from foreign competition and raise the cost of living for the middle class consumer.

    If you eliminate enough American jobs who is going to buy all those cheap trinkets at Walmart? And hostile state actors like China are to be rewarded?

    I guess Lenin was right. Provided the rope is cheap enough you’ll gladly hang yourself.

    It’s interesting that you mention Lenin.  In the old Soviet Union, the government made sure that there were plenty of jobs for the Soviet workers to do.  Yet when the working day was over, the Soviet worker didn’t have access to the consumer goods that Americans and Western European did.  

    Basically, implementing import tariffs is similar to putting economic sanctions on your own country.  

    “Make America North Korea Again” isn’t going to win Trump reelection.

     

    • #38
  9. DrewInWisconsin Member
    DrewInWisconsin
    @DrewInWisconsin

    HeavyWater (View Comment):

    Trump’s tariffs might be good for a select number of CEOs, but they are bad for families who don’t want to pay more for the things they buy.

    If you like higher taxes, you like higher tariffs.

    You understand, of course, that the President has frequently said he wants no tariffs. The question is how to get to that point with your trading partner.

    Study “Share or Steal” game theory.

    • #39
  10. Neil Hansen (Klaatu) Inactive
    Neil Hansen (Klaatu)
    @Klaatu

    EJHill (View Comment):

    Neil Hansen (Klaatu): No. Administration’s make policy concessions all the time.

    Protecting American jobs was Reagan’s policy, not his concession.

    Growing the economy through free trade was his policy.

    • #40
  11. OldPhil Coolidge
    OldPhil
    @OldPhil

    Vance Richards (View Comment):

    DrewInWisconsin (View Comment):

    EJHill (View Comment):

    Vance Richards: And Wall Street had a 799 reaction to the “Tariff Man” comment.

    And exactly where does the loyalty of “Wall Street” begin and end? With the United States or just the United States dollar?

    Wall Street panicked in July, too, then rallied when Juncker came to the table.

    Let it play out.

    Investors can handle good news and bad. What markets hate is uncertainty. Playing hardball to get a good deal is fine, but giving yourself cutesy nicknames doesn’t really help the process (China already knows he is serious about getting a good deal for the US).

    I always laugh when some newsreader says “investors didn’t like X, so the stock market tanked today.” No, “investors” didn’t panic, “speculators” did. I’m an investor, I haven’t significantly changed my investments in 20 years, and I’m happy.

    • #41
  12. OldPhil Coolidge
    OldPhil
    @OldPhil

    DrewInWisconsin (View Comment):

    HeavyWater (View Comment):

    Trump’s tariffs might be good for a select number of CEOs, but they are bad for families who don’t want to pay more for the things they buy.

    If you like higher taxes, you like higher tariffs.

    You understand, of course, that the President has frequently said he wants no tariffs. The question is how to get to that point with your trading partner.

    Study “Share or Steal” game theory.

    He just said “I’m a tariff man.” But we always knew that.

    • #42
  13. The Reticulator Member
    The Reticulator
    @TheReticulator

    HeavyWater (View Comment):
    If Trump continues to raise taxes, which is what tariffs are,

    No, they aren’t taxes. Costs yes, but not all costs are taxes. 

    • #43
  14. DrewInWisconsin Member
    DrewInWisconsin
    @DrewInWisconsin

    OldPhil (View Comment):

    DrewInWisconsin (View Comment):

    HeavyWater (View Comment):

    Trump’s tariffs might be good for a select number of CEOs, but they are bad for families who don’t want to pay more for the things they buy.

    If you like higher taxes, you like higher tariffs.

    You understand, of course, that the President has frequently said he wants no tariffs. The question is how to get to that point with your trading partner.

    Study “Share or Steal” game theory.

    He just said “I’m a tariff man.” But we always knew that.

    Right. So what’s he doing? What’s he indicating to prospective trade partners?

    How do you create a mutually beneficial trade environment when dealing with countries who are uncooperative and sneaky?

    SHARE or STEAL? The other guy keeps playing STEAL. Do you keep playing SHARE to show what a nice little pushover you are, hoping that the other guy will finally see the light and join you in playing SHARE? Because he’s not going to do it. He’s got you playing SHARE while he keeps playing STEAL. And why wouldn’t he when you keep signalling to him that you’re just a pushover?

    No, you play STEAL over and over again like a dirty rotten bastiche until he finally comes around and tries SHARE a few times. Now he’s shown his underbelly, and you, from a position of power, can play SHARE, too so that you can both benefit. And if he tries to revert to STEAL, then you show him that you’re willing to blow up the game again and make you both lose until he gets it through his skull that the only way he will find long-term benefit is to play SHARE.

    “I’m a tariff man!” = “I’m willing to play STEAL. Are you?”

    • #44
  15. Jeff Hawkins Inactive
    Jeff Hawkins
    @JeffHawkins

    Vance Richards (View Comment):

    And Wall Street had a 799 reaction to the “Tariff Man” comment.

    and it’ll go back up 550 tomorrow when he walks it back

    • #45
  16. DrewInWisconsin Member
    DrewInWisconsin
    @DrewInWisconsin

    Jeff Hawkins (View Comment):

    Vance Richards (View Comment):

    And Wall Street had a 799 reaction to the “Tariff Man” comment.

    and it’ll go back up 550 tomorrow when he walks it back

    I’m sure the press will say he “walked it back.”

    That’s what they said when Juncker blinked, too; that Trump was the one who walked it back.

    But did he really? Or did it play out precisely as intended?

    • #46
  17. OldPhil Coolidge
    OldPhil
    @OldPhil

    DrewInWisconsin (View Comment):

    OldPhil (View Comment):

    DrewInWisconsin (View Comment):

    HeavyWater (View Comment):

    Trump’s tariffs might be good for a select number of CEOs, but they are bad for families who don’t want to pay more for the things they buy.

    If you like higher taxes, you like higher tariffs.

    You understand, of course, that the President has frequently said he wants no tariffs. The question is how to get to that point with your trading partner.

    Study “Share or Steal” game theory.

    He just said “I’m a tariff man.” But we always knew that.

    Right. So what’s he doing? What’s he indicating to prospective trade partners?

    How do you create a mutually beneficial trade environment when dealing with countries who are uncooperative and sneaky?

    SHARE or STEAL? The other guy keeps playing STEAL. Do you keep playing SHARE to show what a nice little pushover you are, hoping that the other guy will finally see the light and join you in playing SHARE? Because he’s not going to do it. He’s got you playing SHARE while he keeps playing STEAL. And why wouldn’t he when you keep signalling to him that you’re just a pushover?

    No, you play STEAL over and over again like a dirty rotten bastiche until he finally comes around and tries SHARE a few times. Now he’s shown his underbelly, and you, from a position of power, can play SHARE, too so that you can both benefit. And if he tries to revert to STEAL, then you show him that you’re willing to blow up the game again and make you both lose until he gets it through his skull that the only way he will find long-term benefit is to play SHARE.

    “I’m a tariff man!” = “I’m willing to play STEAL. Are you?”

    But…but…he wants no tariffs, then he’s a tariff man…oh yeah, they’re big and beautiful…and it’s all really just an act, ya know. They’re afraid of him acting tough, so they’ll cave, and even if they don’t cave, he’ll just tariff the hell out of his own companies and citizens because, you know, he’s a tariff man…or not. I’d be happy if he’d conduct these negotiations with some circumspection, but WTH.

    • #47
  18. DrewInWisconsin Member
    DrewInWisconsin
    @DrewInWisconsin

    OldPhil (View Comment):

    But…but…he wants no tariffs, then he’s a tariff man…oh yeah, they’re big and beautiful…and it’s all really just an act, ya know. They’re afraid of him acting tough, so they’ll cave, and even if they don’t cave, he’ll just tariff the hell out of his own companies and citizens because, you know, he’s a tariff man…or not. I’d be happy if he’d conduct these negotiations with some circumspection, but WTH.

    Unpredictability can have its benefits. The fact that we’ve seen this same scenario play out before a couple times gives me confidence.

    Playing China is going to be tough because we’ve let them eat our lunch for the last few decades. But ya gotta start somewhere, and I think the President is just unpredictable enough to pull this off.

    • #48
  19. Neil Hansen (Klaatu) Inactive
    Neil Hansen (Klaatu)
    @Klaatu

    DrewInWisconsin (View Comment):

    OldPhil (View Comment):

    But…but…he wants no tariffs, then he’s a tariff man…oh yeah, they’re big and beautiful…and it’s all really just an act, ya know. They’re afraid of him acting tough, so they’ll cave, and even if they don’t cave, he’ll just tariff the hell out of his own companies and citizens because, you know, he’s a tariff man…or not. I’d be happy if he’d conduct these negotiations with some circumspection, but WTH.

    Unpredictability can have its benefits. The fact that we’ve seen this same scenario play out before a couple times gives me confidence.

    Playing China is going to be tough because we’ve let them eat our lunch for the last few decades. But ya gotta start somewhere, and I think the President is just unpredictable enough to pull this off.

    How has China eaten our lunch?

    • #49
  20. Ed G. Member
    Ed G.
    @EdG

    OldPhil (View Comment):

    DrewInWisconsin (View Comment):

    OldPhil (View Comment):

    DrewInWisconsin (View Comment):

    HeavyWater (View Comment):

    Trump’s tariffs might be good for a select number of CEOs, but they are bad for families who don’t want to pay more for the things they buy.

    If you like higher taxes, you like higher tariffs.

    You understand, of course, that the President has frequently said he wants no tariffs. The question is how to get to that point with your trading partner.

    Study “Share or Steal” game theory.

    He just said “I’m a tariff man.” But we always knew that.

    Right. So what’s he doing? What’s he indicating to prospective trade partners?

    How do you create a mutually beneficial trade environment when dealing with countries who are uncooperative and sneaky?

    SHARE or STEAL? The other guy keeps playing STEAL. Do you keep playing SHARE to show what a nice little pushover you are, hoping that the other guy will finally see the light and join you in playing SHARE? Because he’s not going to do it. He’s got you playing SHARE while he keeps playing STEAL. And why wouldn’t he when you keep signalling to him that you’re just a pushover?

    No, you play STEAL over and over again like a dirty rotten bastiche until he finally comes around and tries SHARE a few times. Now he’s shown his underbelly, and you, from a position of power, can play SHARE, too so that you can both benefit. And if he tries to revert to STEAL, then you show him that you’re willing to blow up the game again and make you both lose until he gets it through his skull that the only way he will find long-term benefit is to play SHARE.

    “I’m a tariff man!” = “I’m willing to play STEAL. Are you?”

    But…but…he wants no tariffs, then he’s a tariff man…oh yeah, they’re big and beautiful…and it’s all really just an act, ya know. They’re afraid of him acting tough, so they’ll cave, and even if they don’t cave, he’ll just tariff the hell out of his own companies and citizens because, you know, he’s a tariff man…or not. I’d be happy if he’d conduct these negotiations with some circumspection, but WTH.

    This reminds me of the infomercial for the new spaghetti strainer. Using the old strainers are just so awkward and confusing  (cue actor to comically not know how to use a good old strainer and so spill everything everywhere in befuddled frustration).

    • #50
  21. James Gawron Inactive
    James Gawron
    @JamesGawron

    EJHill: If you asked any conservative if we should unilaterally disarm militarily they would rightfully look at you as if you had grown a second head. Yet, they will insist on complete unilateral disarmament in trade. But, Trump, right?

    EJ,

    Ahhh, a man after my own heart. Sometimes one can make a completely cogent argument in a few short sentences. If so why not? Let them all thrash about with lots of calculus and blarney. You made the point perfectly. Need say no more.

    Regards,

    Jim

    • #51
  22. Jack Hendrix Inactive
    Jack Hendrix
    @JackHendrix

    I’m fairly certain these days the tariff debate (if we can even call it a debate) has long since ceased to be anything more than a reflection of how the debaters feel about Trump.

    Politically, tariffs may be great; who knows.  Economically, they may also be great; who knows. I doubt Trump in his intentional ignorance here has sufficient knowledge to beat back Hayek on central planning but hey, I hear he’s a genius.

    But do we have to assume today that Trump is right about his policies? How could we possibly know anything about even the short term effects much less the long term!

     

     

    • #52
  23. DonG Coolidge
    DonG
    @DonG

    Neil Hansen (Klaatu) (View Comment):
    How has China eaten our lunch?

    They hacked the OPM database and stole the identities of 22M federal employees.  And they hacked Hillary’s server and they hacked our spy communication network and killed all our Chinese spies.  They use their spy network to steal our industrial secrets.  Then they have protectionist policies.

    • #53
  24. Neil Hansen (Klaatu) Inactive
    Neil Hansen (Klaatu)
    @Klaatu

    DonG (View Comment):

    Neil Hansen (Klaatu) (View Comment):
    How has China eaten our lunch?

    They hacked the OPM database and stole the identities of 22M federal employees. And they hacked Hillary’s server and they hacked our spy communication network and killed all our Chinese spies. They use their spy network to steal our industrial secrets. Then they have protectionist policies.

    Wait, spying on another country is “eating its lunch?”  We must be eating the lunch of every nation on Earth!

    Their protectionist policies impoverish their people, no one else’s.

    • #54
  25. TBA Coolidge
    TBA
    @RobtGilsdorf

    The Reticulator (View Comment):

    cdor (View Comment):

    EJHill: “The Republican Party believes that protectionist tariffs and quotas are detrimental to our economic well-being. Nevertheless, we insist that our trading partners offer our nation the same level of equity, access, and fairness that we have shown them. The mutual benefits of trade require that it be conducted in the spirit of reciprocity. The Republican Party will consider appropriate measures necessary to restore equal and fair competition between ourselves and our trading partners.” From the 1980 Reagan Republican platform.

    Fairness, reciprocity, equal and fair competition…sounds like FAIR trade, not FREE trade to me. It sounds like Trump. But , wait, ooh Trump…how icky. This can’t be correct. Trump is just a stupid barbarian. Dumb like a fox. He talks up his opposition as if he were making a marriage proposal. But while Trump is oooing and cooing, he has a hammer behind his back. What’s the hammer? The U.S. market is the hammer he knows he can drop anytime. Do we want fair, reciprocal, and equal relations with China? Well what we do not want is to wake up one morning to find ourselves completely dominated and controlled by China. That is where we are heading thanks to the near treasonous globalists of the Republican/Democrat Party and their giving away of our country over the past 40 years. I can’t blame the Chinese. They took what our “leaders” gave them and kept asking for more. Why wouldn’t they? Now there is a chief that sees what’s cooking in the kitchen and is intent on changing the menu. TARIFF MAN.

    Thanks for this find @ejhill. We haven’t always been crazy.

    I’ve always been opposed to fair trade, myself.

    I am against fair trade. But I am more against losing through being played. 

    • #55
  26. TBA Coolidge
    TBA
    @RobtGilsdorf

    EJHill (View Comment):

    Vance Richards: And Wall Street had a 799 reaction to the “Tariff Man” comment.

    And exactly where does the loyalty of “Wall Street” begin and end? With the United States or just the United States dollar?

    I don’t even know what “Wall Street” is; if the companies there are MNCs then “Wall Street” is as American as the UN. 

    • #56
  27. TBA Coolidge
    TBA
    @RobtGilsdorf

    Neil Hansen (Klaatu) (View Comment):

    Characterizing Reagan as anything but a believer in free trade is simply false. He understood the benefits of freedom in trade as in all economic activity. Reciting a handful of exceptions to the general rule does not change the nature of the rule.

    I find it curious you had to delve into the party platform to find words to suggest Reagan was Trumpian on this issue. Did the “Great Communicator” never express these ideas himself?

    Trump simply does not understand how trade (or alliances) works. Thinking tariffs make us rich is economic illiteracy.

    Threats don’t work if the threatenee doesn’t believe you’re crazy enough to follow through. 

    • #57
  28. TBA Coolidge
    TBA
    @RobtGilsdorf

    HeavyWater (View Comment):

    Tariffs are taxes on the middle class consumer. Those who support limited government, limited taxation and individual freedom should oppose higher import tariffs.

    I do. So does Trump in most cases. 

    • #58
  29. TBA Coolidge
    TBA
    @RobtGilsdorf

    Cato Rand (View Comment):

    Whether there are distributional benefits to tariffs that are substantial enough to justify their manifest costs is something we can argue about, but the rationale articulated in the tweet is unmitigated ignorance. Claim that the benefits outweigh the costs if you must, but don’t deny the costs. It just makes him look foolish.

    Or rash. Like a cowboy. 

    • #59
  30. TBA Coolidge
    TBA
    @RobtGilsdorf

    philo (View Comment):

    EJHill (View Comment): As Reihan Salam wrote last June in National Review, “For all my misgivings about Donald Trump’s economic diplomacy, he has not rejected the modern Republican party’s stance on trade. Rather, he has made a break with George W. Bush’s approach while harkening back to Reagan’s.”

    So he dropped the “compassionate” modifier from the 1999-2000 marketing gimmick that rendered the principles involved mostly impotent and returned to results based leadership. Who woulda guessed?

    As others have noted in more direct terms, improving the cards in his/our hand was not free and painless but it allowed (or is allowing) him to play an honest, aggressive game instead of the weak, submissive doormat approach of the last several decades. Mr. Trump will win some and lose some (and the market will throw its temper tantrums) but its nice that our guy at the table actually has everyone’s attention and doesn’t have the traditional “kick me” sign on his back. This fresh approach is good for conservatism…and good for America.

    This is my thinking hoping as well. 

    • #60
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